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Thanks To Your Local Economy, Renewables Aren’t Going Anywhere – Episode 15 of the Building Local Power Podcast

| Written by Nick Stumo-Langer | No Comments | Updated on Apr 6, 2017 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/thanks-to-your-local-economy-renewables-arent-going-anywhere-episode-15-of-the-building-local-power-podcast/

Welcome to episode fifteen of the Building Local Power podcast. For full transcript of the podcast, click here.

In this episode, Christopher Mitchell, the director of ILSR’s Community Broadband Networks initiative, interviews John Farrell and Karlee Weinmann, researchers for ILSR’s Energy Democracy initiative on the prospects of renewable energy given President Trump’s executive orders undermining the Clean Power Plan. The group discusses how the strong market for renewable energy will endure any federal level interferences,

This discussion also features the (virtual) ghost of Ken Bone to shift the discussion how the accelerating push to renewables will work on a local level where individual fossil fuel power plants are dominant.

“A lot of that growth [around renewables] is rooted in state policies that support it and encourage it and not necessarily in any action that happens or doesn’t happen at the federal level,” says Karlee Weinmann of the shift in federal energy policy away from renewables and towards fossil fuels.

Play

Here is the piece on the red sweater-clad Ken Bone and his energy question at the second presidential debate during the 2016 election:

A Deep Dive to Answer Ken Bone’s Energy Question

Here are the reading/watching recommendations from the group this week.

From John:

From Chris & Karlee:

View the full transcript of the podcast, below.If you missed our previous episodes make sure to bookmark our Building Local Power Podcast Homepage. Please give us a review and rating on iTunes or wherever you subscribe to podcasts.

Full Transcript of Podcast:

Chris Mitchell: John, I hear that you’ve been thinking about where our energy has come from recently.
John Farrell: I haven’t just been thinking about it recently, Chris. In the last decade it is remarkable to note that over 40% of our new power plant capacity and increasingly more of that is coming from renewable energy sources alone and the remainder of that is pretty much coming from natural gas. In other words, there’s almost no new coal power plants being built in this country, in the last decade.
Chris Mitchell: Also no nuclear power plants or other facilities.
John Farrell: There hasn’t been a new nuclear plant built in a long time and the only one that’s under construction in Georgia, continues to experience construction delays, increasing its cost.
Chris Mitchell: The other thing that came to mind when you said that, was that in the last decade was entirely after the year 2000, which still I find amazing.
John Farrell: Yes, in fact it’s not even that close to the year 2000 anymore.
Chris Mitchell: It really isn’t. Welcome to another Building Local Power podcast from the Institute for Local Self-Reliance. We’re going to talk about clean power today and the Clean Power Plan from the Obama administration that the Trump administration has just wiped out and whether we should freak out or celebrate or how we should react in general to this monumental, monumental change in policy. Is that right John?
John Farrell: It is a big change in policy but I think that it would be important to note that we should all take a deep breath before we consider the implications of this.
Chris Mitchell: There’s nothing better than a podcast that talks about taking a deep breath. That was John Farrell, who runs our energy work. I’m Chris Mitchell and also Karlee Weinmann, who is here with a bemused look on her face and does all the work that John takes credit for. Welcome back Karlee.
Karlee Weinmann: Hi, Chris.
Chris Mitchell: It’s great to have old podcast veterans back on Building Local Power. Let’s just take a quick step back and talk about what was the Clean Power Plan from the Obama administration, in brief?
John Farrell: It was really just a set of rules that would guide states on the course to reduce greenhouse gas emissions from power plants. It was going to particularly affect states that had a lot of coal power plants that were disproportionately putting a lot of greenhouse gas emissions into the air and was going to require them to come up with a plan and the next thing was that the state was able to choose what that plan was but they would have to hit a certain target for emissions reductions.

When I said at the beginning, “We need to take a deep breath about what’s happening here.” That’s for two reasons. One is that because it was a fairly complex rule there’s a process for walking it back. I heard one commentator on the radio say, “Creating the rules was like walking up a set of stairs and undoing them means you have to walk down the same set of stairs.” Changes in the rules will take some time.

The second thing is that for states that were agreeable to the Clean Power Plan, which is to say they wanted to do something anyway, they’re going to go ahead and find ways to implement those rules or find other ways of meeting those greenhouse gas emissions regardless.

I think we have two hopeful elements here. One is that it will take a while to undo this and the other is that many states will move ahead, whether or not the federal government is continuing to compel them to do so.

Chris Mitchell: Karlee, I just want to ask you a question, as someone who came to us as a reporter covering a lot of business. I think of you as somebody who knows a lot about markets. It strikes me that all of this change in policy, the market isn’t sort of thinking, “Oh, carbon is free in the future.” It seems like in many ways, not much has changed.
Karlee Weinmann: Utilities are increasingly moving toward clean energy and they have been for a long time, based on the economics. It’s not like the Clean Power Plan upended the marketplace and as John said, it’s not like this decision by President Trump will upend the marketplace.

Fracking is, I think, a great and instructive example of this. Certainly that compounded the shift away from coal and that had nothing to do with the policy that we’re talking about here today. The bottom line is that nothing is going to save coal from these economics. Even if natural gas gets more expensive, renewables remain on a trajectory that makes them increasingly accessible and attractive.

Chris Mitchell: Well that’s, I think, a good sign. It’s also a sign, I just sort of wonder a little bit about the hype on both sides. To be glib, investors are smarter than voters and I don’t think investors have a sense like, “Hey, let’s go build three coal power plants now.”
John Farrell: You know it’s funny you should say that Chris, because one of the tools that Karlee and I use, and many others in our field, is analysis done by the investment bank, Lazard, at least I think that’s the name. They do this every year and it compares the cost of energy from different power plants. What you can see in their most recent one, which is like version 10 of their analysis, is essentially that renewable energy is the cheapest form of electricity across the board. That solar and wind and of course, things like energy efficiency, are cheaper than any other kind of power plant you can build. Whether it’s a nuclear one, a coal one or a natural gas one.

When Karlee’s talking about the economics being in the driver’s seat here, in the wake of the Clean Power Plan or it’s reversal, like you said, the folks informing the investors, the investment banks, are essentially saying put your money in renewables. That’s the cheap stuff.

Chris Mitchell: It strikes me, from the stat you brought from the beginning, 40% of energy gains over the last 10 years, coming from these renewable energies, this clean energy. Maybe I’m stuck in thinking about this from a 20 year ago perspective, which was like people were saying, “Oh, sure solar’s doubling but it’s a fraction of a fraction. It doesn’t matter, it’s not adding up.” It seems like it’s adding up now.
John Farrell: Yeah, it is. In fact, if you look on our website and Karlee’s updating every quarter our analysis of new power plant capacity, you can see that this chart went from being almost all purple and black, which was representing fossil fuels, to this big, bright, band of blue, which represents wind power, which has been most of that new capacity.

In the past couple, three, four years, all of a sudden there are these big bars of orange and red, which represent large-scale and small-scale solar. It is really adding up. Although, on an annual basis, the amount of total energy, electricity that we get from that is still relatively small, it’s growing very quickly. It shows up first in these charts around capacity, in the next couple of years we’ll start to see that in terms of how much energy we get on an annual basis.

Karlee Weinmann: A lot of that growth is rooted in state policies that support it and encourage it and not necessarily in any action that happens or doesn’t happen at the federal level. I think that just goes to show that where we’re really seeing movement, in terms of policy, that advances or inhibits growth in renewables and clean energy, that’s not happening at the federal level per se.
Chris Mitchell: When you say it’s at the state level, I’m curious, I immediately start thinking, “Oh, well probably like California and blue states.” But then I remember Texas and even Iowa, I’m not really sure what color Iowa is anymore, yellow for corn maybe. I’m curious what states in particular have really been driving this. I’m guessing it’s not all states.
John Farrell: No, it’s not all states but there’s no question there is some partisan lean to the states that are driving a lot of this. California, for example, happens to be a very deep blue state but it also happens to be a state that has a really good renewable energy resource. In fact, I would say that in some ways it’s even more powerful of a driver.

You take Iowa, for example, regardless of its politics, it has an incredible wind resource and in fact, the policy that got its wind industry started expired 10 or 20 years ago. All of the development in wind power in Iowa, which is one of the nation’s leaders on a per capita basis, is because wind simply is a really cheap resource for supplying electricity needs because wind blows a lot in Iowa.

On the other hand, you have states like Minnesota or Colorado or California or New York, where we’ve enacted policies that are pushing utilities toward renewables. Of course the analysis shows, in retrospect, that that was a very cost-effective choice. You’re also seeing advances in places like Arizona or Nevada or Texas, where it’s not really policy driven, it’s just economics.

In West Texas you have tens of thousands of megawatts of wind power, because it’s a very good wind resource but increasingly solar. Excellent solar resource in Arizona and Nevada and New Mexico, driving a lot of solar adoption there.

Chris Mitchell: One last thing on this area and the economics, is you mention that it’s a good bet to force utilities to go with the renewables. Now in the past you and I have talked a lot about what was the best way of subsidizing these forms of power, feed-in tariff, production tax credit, the problems associated with some of these. Are these things unnecessary now?
John Farrell: I don’t think it’s unnecessary to still have policy that is helping toward the transition toward renewable energy. What I would say, is that that kinds of policy we need are different. Whereas a decade ago it was really important to sort of throw money at it, to get the industry built up, to build the manufacturing experience, to get the supply chains developed, to get people trained in and employed and build all of that part of the installation and manufacturing process.

What I think has happened now is that we need to figure out ways to maintain competitive markets. For example, a 1978 federal law called PURPA, has required utilities to buy electricity from competitive sources ever since the late 1970’s. It came out of the oil crisis and the desire to find more economical power sources. Well that law is still enforced in all 50 states, requiring us to look at economical sources and utilities, now that they are facing competition from renewable energy resources produced by non-utility participants, are saying, “Hey, we want to get rid of that law.”

There are still ways in which the entrenched interests, whether it’s monopoly utility companies, or the fossil fuel industry, are trying to push back against renewables and we need to hold firm on market access on the basis of cost competitiveness.

Chris Mitchell: One last thing before we get to our surprise call in guest, which is a quote from the past. I wanted to note that I was listening to Charlie Sykes’ last week. He has a show on Indivisible, which is a joint production of, I think, Minnesota Public Radio, WNYC and others. It’s the first 100 days of the Trump presidency, talk radio. Charlie Sykes is a conservative talk show host who is from Wisconsin.

He’s a very interesting guy. He was making the case that he felt like the Clean Power Plan would have been really bad for Wisconsin. It would have cost, in his words I think, billions of dollars in extra costs to rate payers and would have been therefore bad to business. I’m just curious how you would respond to that. I think it looks like Karlee is all ready to offer some context.

Karlee Weinmann: I think it’s fair to say that in some states like Wisconsin utilities might have made poor bets on infrastructure like coal plants in the past but now it’s up to regulators to hold them accountable and part of that is the Clean Power Standards, that may or may not be imposed by the federal government, but part of that is holding utilities to sensible, responsible economics like the kind John has been talking about. It can cause rate payers a lot of money, as well, to stay the course that we’ve seen from these, maybe more short-sighted utilities, in the past.
John Farrell: I would just like to add to that. There’s a couple more factors here. One in terms of cost is that the health and environmental costs of our power system has always been socialized. You have private profits for utilities building these power plants and then socializing the costs, the health and environmental costs.
Chris Mitchell: Could you just explain a couple of those?
John Farrell: Yeah, for example, mercury pollution from coal power plants in particular, gets into lakes and streams and waters, gets consumed by fish or absorbed by fish and then raises the toxicity to the level that we can’t eat fish anymore, particularly vulnerable populations like children and pregnant women.
Chris Mitchell: Right, they only get it like once a week or something like that.
John Farrell: Exactly. That’s been one of the costs that we’ve had and certainly not one that we pay for on our utility bills. The second thing I would say though too, and this is a bit of a criticism of the Clean Power Plan is that as an administrative rule, and it really is the only way that Obama had to implement it because he didn’t have a Congress willing to work with him, and coming from the top down at the federal level, it really just applies sort of brute force to utilities to make them change the way that they’re doing business.

A lot of the economical opportunities that we have for renewables, though, aren’t from the utilities. They’re from the bottom up. They’re from consumers putting solar on their own households. They’re from community solar, like we have in Minnesota or New York or Maryland. They’re from distributed energy production that could use that 1978 PURPA law to sell power competitively to the utility company.

I think one of the potential costs that, I don’t know if this is what Charlie Sykes was getting to or not, but I think one of the potential problems with the Clean Power Plan was the fact that this top down kind of bureaucratic solution would have made it difficult for some of those things to come to market that might be much more cost-effective than asking utilities to turn the ship.

Chris Mitchell: With that, we want to take a call that comes direct to us from the Town Hall debate between presidential candidate Clinton and presidential candidate Trump. Ken Bone, I think you’re on the line. What did you want to ask?
Ken Bone: What steps will your energy policy take to meet our energy needs while at the same time remaining environmentally friendly and minimizing job loss for fossil power plant workers?
Chris Mitchell: Candidate John, tell us what your plan would include.
John Farrell: First of all, I just want to point out that Ken Bone got picked on a lot in the media or highlighted in the media for the fact that he had a bright red sweater and then a whole bunch of other stuff went on. It was really one of the most intelligent questions that we’ve had about energy policy in a long time.
Chris Mitchell: I think that’s probably why he got picked on. I mean, honestly, I just don’t see our media being able to really deal with those sorts of intelligent, layered questions, which aren’t sort of red meat for one side or the other.
John Farrell: Right and that’s true. There wasn’t a lot of red meat for either side in this particular question. It was a very well-nuanced one. I think the most important part of his questions really was around this notion of both environmentally friendly energy and then what happens with fossil fuel power plant workers.

There is a recognition in that question that we are moving away from fossil fuels. Despite that, you see in the recent news here about the Clean Power Plan, this assumption that we’re going to somehow roll back these regulations and it’s going to allow these, in particularly, coal mining and coal jobs to come back.

The truth is, in the last 50 years, employment in the coal mining sector has dropped by about two-thirds even as production has more than doubled. That has nothing to do with renewable energy because there weren’t renewables on the system in the sixties and seventies and eighties and even the early nineties.

Chris Mitchell: It’s Wyoming’s fault actually, with the Powder River Basin coal and the coal from out west and the mountaintop removal coal. It’s all highly capital now.
John Farrell: Right. Unfortunately that’s something that candidate and then President Trump has not been really interested in getting into the nuance of. He’s really exploiting the job losses from automation in the coal mining sector in order to unpack and destroy these environmental regulations.

I think the crux of this then, is that in the same way that some people say well the Stone Age didn’t end because we ran out of stones, that the Coal Age is going to end, not because we run out of coal but because we have cheaper ways to produce our energy than we did before.

Ultimately, the issue here is, what is that we can do? What is a reasonable approach to our energy system that accomplishes these goals of environmental sensitivity, meeting our energy needs and respecting fossil fuel power plant workers and fossil fuel workers? The Clean Power Plan reversal does none of these things. It doesn’t mean that we will get environmentally friendly energy, in fact it undermines a regulation in favor of it. It doesn’t really help us, in terms of cost-effective energy either.

In fact, the biggest winners being talked about in the news here are coal mining companies, which will be able to sell more coal to existing power plants perhaps, at the expense of the workers for whom often end up being on the losing end of bankruptcy filings, for example, where they lose their pensions and their healthcare and everything else.

What can we do? There were a number of things that we actually outlined, that we wrote about on our website, in light of Ken Bone’s question at the debate and there were a couple of things. One is, as I have said earlier, reinforcing the access for renewable energy to the market.

Number two is figuring out how we can retrain people from the fossil fuel sector to work in those jobs and to make sure those are good jobs. Whether that’s helping unions organize in that area, like they have the fossil fuel industry, whether that’s coal mining jobs or power plant jobs or just making sure that we have a way to transition folks into those jobs that are generally good paying.

The third thing is we just have to admit that the fossil fuel jobs are going away. There’s nothing that we can do, from a federal regulation perspective, other than maybe something like Wyoming tried to do recently, which was to pass a law prohibiting utilities from building renewable energy power plants. It would be incredibly expensive and have all these adverse, societal effects from pollution and on down. It might keep them working for at least a little bit longer. Maybe, except that as the cost of energy went up from the utility company, people are going to put solar on their rooftop and stop buying it from the utilities.

There’s really no saving those jobs. How do we have a just transition? How do we help those folks?

Chris Mitchell: I feel like I often hear people talking about job retraining. We’ve heard about this from NAFTA. We’ve heard about this from TPP and trade agreements. People always talk about how the people who end up losing their jobs can just get new jobs. It seems like when you actually look at those programs, they’re hard to pull off. What do we have to do to actually make sure they’re going to work in this instance?
John Farrell: Well, we give a little bit more detail in the posts that we produced in response to Ken’s question.
Chris Mitchell: Which I believe was a deep-dive to answer Ken Bone’s energy question at the Institute for Local Self-Reliance’s webpage on ILSR.org.
John Farrell: Yes, thank you Chris. I think that what’s a key here to understand is that retraining is just one piece of this. We need wage insurance, which means insuring the folks that are in these jobs can maintain their current wages for a set period of time. Maybe at least five years so there is a reasonable period of transition.

The second one is that we have that retraining assistance but it might also include relocation assistance because it may be that the jobs for renewable energy are not in Appalachia like the jobs were for coal mining or for working in a power plant.

A similar issue actually came up recently in Minnesota about the potential closure of a coal power plant in Becker, a small rural community. Another thing that we have to consider too is not just the outcome for these workers but the outcome for the communities. These big power plants are a sizeable portion of a community’s property tax revenue and a sizeable presence in the community. What can we do for those communities?

In Minnesota, we had a bill passed that said we’ll build a new power plant there to replace that. It’s a billion dollar rate payer subsidy for a town of 2,000 people in order to maintain that town’s character. There are probably less expensive ways we can do that. We outline a couple of them in our research. It comes from some very good, very thorough work done by the American Prospect.

Karlee Weinmann: There are a number of these workers, a fairly large proportion, that are going to be hitting retirement age before we really need to be all in on this transition. It’s not necessarily going to be a one to one, we need to find a new job and a solution for every single worker and while I acknowledge that a just transition is of paramount importance, this is and has been a shrinking industry for a long time. That evolution in the fossil fuel industry is I think important to remember in this context.
Chris Mitchell: Right, actually it just strikes me whenever I hear people talk about how great these jobs are, that one of the things I always remember in growing up in Eastern Pennsylvania, I didn’t know any miners certainly, but there was always this sense that people worked hard, dirty jobs, not because they loved it and it was awesome but because they wanted to make sure their kids had a good education and had all the opportunities that they didn’t have. They could go on and not spend their life working in a job, which was unsafe in many cases. I think it’s an important context to bear in mind.

I wanted to end with a question of hope, which is we talk around the office a lot about whether things are heading in a direction that’s one of despair or not. I’m curious, when you look at this, and we’ve elected someone that I think no one in this office supports as president, who’s doing a lot of damage to the things that we care about and yet it seems to me like it’s actually maybe he can’t do that much damage because we have local leadership and that sort of thing. I’m just curious what you take away from it Karlee?

Karlee Weinmann: I would say that I take a lot of heart in the local leadership that we have and in many communities around the country since November. With regard to these clean energy issues, I think we’ve seen a tremendous willingness on behalf of local leaders to take ownership of this issue and to really make it their own in way that maybe they weren’t as active about before November. But now, especially in light of the recent actions regarding the Clean Power Plan, I think that there is a new kind of emphasis that really opens the door to local action that can really deliver the most meaningful results here.
Chris Mitchell: Do we have any recommendations for people to check out for reading or listening or viewing or anything like that.
John Farrell: There was a really remarkable piece recently published by The New York Times on Uber, looking at its business model and the tension between the company’s interest and the driver’s interest. They had some interactive features that allowed you to kind of play around with what would happen if there were more drivers or less drivers. It’s a really stunning revelation of what the sharing economy is about and whether or not Uber is really good for the people who are working for it, whether or not they’re employees or not. I highly recommend it as a good way to get some insight on that.
Chris Mitchell: I’d like to suggest a recommendation from Karlee and I, which is the video that you recommended we watch. Do you remember the name of it? The one hour presentation about the electric vehicles and driving.
John Farrell: Oh yes. It’s Tony Seba did a presentation. He’s an author of a book called Clean Disruption. I don’t recall the exact title of the Youtube video from 2016 for the presentation he gave but it is a remarkable look at the way that the clean energy economy will be changing thanks to Silicon Valley technology over the next decade.
Chris Mitchell: Great. Thank you both.
John Farrell: Yeah, thanks Chris.
Karlee Weinmann: Thanks Chris.
Lisa Gonzalez: That was John Farrell and Karlee Weinmann joining Christopher Mitchell for episode 15 of the Building Local Power Podcast. John and Karlee work on our Energy Democracy Initiative and Christopher heads up the Community Broadband Networks Initiative. Check out John and Karlee’s work at ILSR.org/initiatives/energy.
Chris Mitchell: Hey everyone. Please tell your friends, tell others who might be interested about this show. If you have a chance to rate us on iTunes please do. Several people already have. We really appreciate all of the comments and we really appreciate you taking the time to listen to us.
Lisa Gonzalez: We also encourage you to subscribe to this podcast and all of our other podcasts on iTunes, Stitcher or wherever else you get your podcasts. You can also sign up for our monthly newsletter at ILSR.org. Thanks to Dysfunction Al for the music licensed through Creative Commons, the song is Funk Interlude. This is Lisa Gonzalez from the Institute for Local Self-Reliance. Thanks again for listening to episode 15 of the Building Local Power podcast.

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.